Jim Cramer says achieving early retirement comes down to just 3 key assets in your investment portfolio
Moneywise
10 min read
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If early retirement is something you're striving for, you're not alone. A 2024 YouGov survey found that 22% of Gen Zers and 30% of millennials expect to retire between the ages of 51 and 60 (1).
That’s young, especially if you consider that Medicare eligibility typically doesn’t begin until age 65 and Social Security’s full retirement age for Gen Zers and millennials is 67.
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What’s more, Gen Z believes the ideal retirement age is 59, while Millennials believe it is 61, according to Manulife John Hancock's 2025 Financial Resilience and Longevity Study (2).
These aspirations might be too ambitious, given the affordability crisis gripping this generation. TIAA’s 2025 American Retirement Confidence Survey found that two in three Americans believe retiring even between the ages of 65 and 70 is unattainable — with many planning to work until they’re physically unable to do so (3).
If your goal is to retire early, you’ll need to save aggressively early on in your career and invest your money wisely. Finance personality Jim Cramer has some guidance in that regard.
He told CNBC (4) he has a “radical” approach to help everyday investors grow their portfolios and meet their financial goals. Here are the three assets Cramer says to invest in — and what you need to know about them.
Index funds
Investing in index funds is a strategy many financial experts recommend.
“Putting some money in an index fund isn’t bad advice — it’s a good way to play it safe,” Cramer said on his show Mad Money with CNBC (5).
Index funds are passively managed funds that aim to mirror the performance of a specific market benchmark. An S&P 500 index fund, for example, will seek to replicate the S&P 500’s performance by matching its holdings and weightings.
They differ from actively managed funds in that they don’t have professionals hand-picking stocks. An active fund will try to perform better than the S&P 500 by picking a handful of stocks from it. Conversely, rather than try to beat the market, an index fund is happy to capture its returns.
Investing legend Warren Buffett has long recommended that everyday investors put their long-term savings into index funds — claiming it “makes the most sense practically all of the time (6).”
And research supports this theory. Index funds tend to outperform the majority of fund managers tasked with picking stocks, especially when factoring in their lower fees.
For example, according to S&P Global, in the 15 years ending June 30, 2025, roughly 88% of actively managed large-cap funds underperformed the S&P 500 index (7).
The big trick is to start investing today to take advantage of things like compound interest. Investing just $20 per week adds up — but if you do it consistently.
For instance, investing $20 each week for 30 years can help you save over $179,000, assuming it compounds at 10% annually (8).
The easiest way to stay consistent is to invest automatically, without even thinking about it.
Platforms like Acorns allow you to turn your spare change from everyday purchases into an investment opportunity.
Once you link all your cards, Acorns will automatically round up all expenses to the nearest dollar and set aside the difference. Once your savings hit $5, they are automatically invested in a smart investment portfolio.
So, when you buy your morning coffee for say $4.25, Acorns deducts $5 from your account, and invests the difference in a diversified portfolio of ETFs managed by experts at Vanguard, BlackRock, etc. This way, your everyday purchases can start working for you behind the scenes.
While investing in index funds could yield great returns for your portfolio, it won't help you beat the broad market. And you may need to do that if you want to retire early.
To this end, Cramer suggests allocating 45% to 50% of your portfolio to five different stocks. The bulk of these stocks, he said, should offer innovative products or services, durable competitive advantages over peers and be capable of delivering consistent earnings growth over several decades.
“Most people can’t afford to purely play it safe unless they’re already rich, which is why you have to put the other half of your holdings in a mix of individual stocks that you choose and a non-stock hedge,” Cramer said.
If you’re relatively young, Cramer also suggests that one or two of these stocks should be more speculative. Such stocks offer greater upside potential but also come with more risk. If they go bust, Cramer added, young people at least still have plenty of time left to make their money back.
Throughout the years, there have been many individual stocks that have outperformed the stock market. By the end of trading on Oct. 31, the S&P 500 had climbed 95% in five years. NVIDIA, on the other hand, rose about 1,291% in value over that same timeframe.
Use a discount broker
For those who want to invest more actively, using discount brokers like Robinhood can help lower your total bill. You can buy and trade stocks, options, ETFs and even cryptocurrency.
You can get started testing the waters with as little as $1. Even better, you can get a free stock when you sign up for Robinhood from a top American company so you can get investing today.
Get expert advice
Identifying stocks that can deliver long-term market-beating returns can be challenging. That’s why getting expert opinion can help ensure you’re not putting money on losers.
For instance, The Motley Fool Stock Advisor’s experienced team of analysts focuses on identifying high-quality businesses with long-term growth potential.
Members get two carefully selected stock recommendations each month. Even better, you can access ongoing rankings, including The Motley Fool’s 10 Best Stocks to Buy Now, along with expert insights, financial planning articles, and curated ETF ideas designed to help you make smarter portfolio decisions.
Motley Fool Stock Advisor plans start at $199 per year, but right now you can try it for 30 days and, if you are unsatisfied, get your membership fee back with no questions asked.
Diversified assets
While Cramer's advice is to put the bulk of investment capital into index funds and individual stocks, he also supports the idea of allocating 5% to 10% of an investment portfolio to what he calls "insurance" assets — investments that can serve as a hedge against stock market downturns. Two of Cramer’s favorites in this category are gold and bitcoin.
In February of 2010, the price of gold was $1,112.50 per ounce. Fast forward to January 2026, and the price had climbed to $5,284.70.
If you look at the price of gold over the past 100 years, you'll see that it's gone up substantially. Because gold is only available in a limited supply, it has a tendency to hold its value, making it a good hedge against not just stock market volatility, but inflation.
Bitcoin, of course, has not been around as long as gold. It was worth just pennies when it first launched in 2009. In October 2025, it hit a record high of just over $126,000.
Over the past year, gold prices nearly doubled, climbing more than 93% (9), while bitcoin is hovering at $83K per coin — a far cry from fall highs and down 5.11% year-over-year (10).
Through the years, bitcoin’s value has fluctuated substantially, and not always for the better. Bitcoin is considered a very risky investment for many reasons, including its lack of regulatory protection, questions about its sustainability and extreme price volatility.
Hedge your portfolio with gold
Gold has been one of the best-performing assets over the past year, as investors flock toward the safe-haven metal amid growing economic uncertainty. As of late January, the spot price of gold is already up almost 20% year to date.
You can combine the inflation-resistant properties of the precious metal with the tax advantages of an IRA by opening a gold IRA with the help of Priority Gold.
Cramer's approach to building wealth is valid but also somewhat risky. His guidance for the individual stock portion could create insufficient diversification. And crypto assets in general can be risky, not just because of their relative newness, but because the crypto market is still highly unregulated.
If you’re going to follow Cramer’s guidance, make sure you research your individual stocks carefully and that you understand the risks of owning an asset like bitcoin.
Consult a fiduciary
You can easily connect with a vetted FINRA/SEC-registered financial advisor near you for free through Advisor.com.
All you have to do is answer a few questions about your financial situation, and Advisor.com will connect you with a qualified expert. Every advisor on their network is a fiduciary, meaning they’re legally obligated to act in your best interests.
Hiring a financial advisor can also be a lifelong commitment.
